CSR in Global Context

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Corporate Social Responsibility: In Global Context
Article · January 2013
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Andrew Crane Dirk Matten

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This is the pre-publication version of Chapter 1 from Crane, A., Matten, D. and Spence, L. (2008), Corporate Social Responsibility: Readings and Cases in
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Global Context, London: Routledge, pp.3-20.
CHAPTER 1
CORPORATE SOCIAL RESPONSIBILITY: IN GLOBAL CONTEXT
In this chapter we will:
 Examine the recent rise to prominence of corporate social responsibility

 Analyse different definitions of corporate social responsibility
 Outline six core characteristics of corporate social responsibility
 Explore corporate social responsibility in different organizational contexts
 Explore corporate social responsibility in different national contexts
 Explain the approach to corporate social responsibility adopted in the rest of the book
Introduction: the recent rise of CSR
The role of corporations in society is clearly on the agenda. Hardly a day goes by without media
reports on corporate misbehaviour and scandals or, more positively, on contributions from
business to wider society. A quick stroll to the local cinema and films like ‘Blood Diamond’,
‘The Constant Gardener’ or ‘Supersize Me’ reflect a growing interest among the public in the
impact of corporations on contemporary life.
Corporations have clearly started to take up this challenge. This began with ‘the usual suspects’
such as companies in the oil, chemical and tobacco industries. As a result of media pressure,
major disasters, and sometimes governmental regulation, these companies realized that propping
up oppressive regimes, being implicated in human rights violations, polluting the environment,
or misinforming and deliberately harming their customers, just to give a few examples, were
practices that had to be reconsidered if they wanted to survive in society at the end of the
twentieth century. Today, however, there is virtually no industry, market, or business type that
has not experienced growing demands to legitimate its practices to society at large. For instance,
Electronic copy available at: http://ssrn.com/abstract=1667081

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banking, retailing, tourism, food and beverages, entertainment, and healthcare industries – for
long considered to be fairly ‘clean’ and uncontroversial – now all face increasing expectations
that they institute more responsible practices.
Companies have responded to this agenda by advocating what is now a common term in
business: corporate social responsibility. More often known simply as ‘CSR’, the concept of
corporate social responsibility is a management idea that has risen to unprecedented popularity
throughout the global business community during the last decade. Most large companies, and
even some smaller ones now feature CSR reports, managers, departments or at least CSR
projects, and the subject is more and more being promoted as a core area of management, next to
marketing, accounting, or finance.
If we take a closer look at the recent rise of CSR, some might well argue that this ‘new’
management idea is little more that a recycled fashion, or as the old saying goes, ‘old wine in
new bottles’. And, in fact, one could certainly suggest that some of the practices that fall under
the label of CSR have indeed been relevant business issues at least since the industrial
revolution. Ensuring humane working conditions, providing decent housing or healthcare, and
donating to charity are activities which many of the early industrialists in Europe and the US
were involved in – without necessarily shouting out about them in annual reports, let alone
calling them CSR. Even in a country like India, companies such as Tata can pride themselves on
more than one hundred years of responsible business practices, including far-reaching
philanthropic activities and community involvement (Elankumaran, Seal, & Hashmi, 2005).
What we discover then in the area of CSR is that while many of the individual policies, practices,
and programmes are not new as such, corporations today are addressing their role in society far
more coherently, comprehensively, and professionally – an approach that is contemporarily
summarized by CSR.
As well as the rise to prominence of CSR in particular companies, we can also observe the
emergence of something like a CSR ‘movement’. There is a mushrooming of dedicated CSR
consultancies, all of which see a business opportunity in the growing popularity of the concept.
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At the same time, we are witnessing a burgeoning number of CSR standards, watchdogs,
auditors and certifiers aiming at institutionalizing and harmonizing CSR practices globally. More
and more industry associations and interest groups have been set up in order to coordinate and
create synergies among individual business approaches to CSR. Meanwhile, a growing number
of dedicated magazines, newsletters, email lists, and websites not only contribute to providing an
identity to CSR as a management concept, but also help to build a worldwide network of CSR
practitioners, academics, and activists.
Defining CSR: navigating through the jungle of definitions
In the context of such an inexorable rise to prominence of CSR, the literature on the subject, both
academic and practitioner, is understandably large and expanding. There are now thousands of
articles and reports on CSR from academics, corporations, consultancies, the media, NGOs, and
government departments; there are numerous conferences, books, journals, and magazines on the
subject; and last, but not least, there are literally millions of webpages dealing with the topic
from every conceivable interest group with a stake in the debate.
How then to best make sense of this vast literature so as to construct a coherent account of what
CSR actually is? After all, few subjects in management arouse as much controversy and
contestation as CSR. For this reason, definitions of CSR abound, and there are as many
definitions of CSR as there are disagreements over the appropriate role of the corporation in
society. As McWilliams, Siegel, and Wright (2006) recently declared: ‘there is no strong
consensus on a definition for CSR’. In February 2007, this lack of consensus blew up into
something of a storm on the Wikipedia on-line encyclopaedia when the phrase ‘corporate social
responsibility’ was nominated to be ‘checked for its neutrality’ following a series of
disagreements about its meaning from supporters and critics (Ethical Performance, 2007).
Figure 1 gives just some examples of the different ways that CSR is described and defined by
different organizations across the globe. As this clearly shows, there are some similarities in the
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way that different actors understand CSR, as well as considerable differences. Moreover,
although we often look to academic research to provide clarity amongst so much ambiguity, this
diversity is also reflected in scholarly definitions of CSR. For example, one early writer on CSR,
Keith Davis described CSR as ‘the firm’s consideration of, and response to, issues beyond the
narrow economic, technical, and legal requirements of the firm’(Davis 1973 cited in Carroll,
1999), whilst a few years later Archie Carroll (1979) defined it much more broadly to include
exactly those elements that Davis excluded: ‘the social responsibility of business encompasses
the economic, legal, ethical, and discretionary expectations that society has of organizations at a
given point in time’.
This heterogeneity in CSR definitions has continued unabated. Whilst the Carroll definition
given above is arguably the most commonly cited one, it remains contested, as we will see later
in chapter 3. Therefore, others have taken a different route and rather than specify particular
responsibilities, have offered more general definitions that seek to include the different opinions
on CSR that are evident across the literature. For instance, Brown and Dacin (1997) define CSR
as a company’s ‘status and activities with respect to its perceived societal or, at least, stakeholder
obligations,’ whilst Matten and Moon (2004a) offer the following: ‘CSR is a cluster concept
which overlaps with such concepts as business ethics, corporate philanthropy, corporate
citizenship, sustainability, and environmental responsibility. It is a dynamic and contestable
concept that is embedded in each social, political, economic and institutional context.’
In this book, we will not seek to simply follow one of these definitions, nor will we provide a
new improved one that will simply add to the complex jungle of CSR definitions. In the
contested world of CSR, it is virtually impossible to provide a definitive answer to the question
of what CSR ‘really’ is. Therefore, our intention is to identify some core characteristics of the
CSR concept, which we hope will help to delineate its essential qualities, and will provide a
focus for the definitional debates that continue to surround the subject.
Figure 1 about here
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Core characteristics of CSR
The core characteristics of CSR are the essential features of the concept that tend to get
reproduced in some way in academic or practitioner definitions of CSR. Few, if any, existing
definitions will include all of them, but these are the main aspects around which the definitional
debates tend to centre. Six core characteristics are evident:
 Voluntary. Many definitions of CSR will typically see it as being about voluntary activities
that go beyond those prescribed by the law. The views of the UK government and the EC as
shown in figure 1 certainly emphasise this characteristic. Many companies are by now well-
used to considering responsibilities beyond the legal minimum, and in fact the development
of self-regulatory CSR initiatives from industry is often seen as a way of forestalling
additional regulation through compliance with societal moral norms. The case of UK soft
drinks companies introducing a code of responsible practice in 2006 (see Ethical
Performance, 2006) is a good example of such a CSR initiative that has arguably been
introduced to head off potential regulatory action. Critics of CSR, therefore, tend to see the
element of voluntarism as CSR’s major flaw, arguing that legally mandated accountability is
where attention should really be focused, as the Christian Aid definition demonstrates1.
 Internalizing or managing externalities. Externalities are the positive and negative side
effects of economic behaviour that are borne by others, but are not taken into account in a
firm’s decision making process, and are not included in the market price for goods and
services. Pollution is typically regarded as a classic example of an externality since local
communities bear the costs of manufacturers’ actions. Regulation can force firms to
internalise the cost of the externalities, such as pollution fines, but CSR would represent a
more voluntary approach to managing externalities, for example by a firm investing in clean
technologies that prevent pollution in the first place. Much CSR activity deals with such
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See for example the Corporate Responsibility (CORE) Coalition, a collection of UK NGOs including WWF (UK),
Amnesty International, Action Aid and Friends of the Earth, that ‘work to make changes in UK company law to
minimize companies negative impacts on people and the environment and to maximize companies contribution to
sustainable societies’ (www.corporate-responsibility.org).
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externalities (Husted & Allen, 2006), including the management of human rights violations
in the workforce, calculating the social and economic impacts of relocation or downsizing, or
reducing the health impacts of ‘toxic’ or otherwise dangerous products, etc. For example, a
recent example of CSR in Asia was Unilever’s collaboration with Oxfam to assess the
positive and negative impacts of its business on the lives of poor people in Indonesia – this,
in effect, was an attempt to account for one of the firm’s main externalities in the region (see
Clay, 2005).
 Multiple stakeholder orientation. CSR involves considering a range of interests and

impacts among a variety of different stakeholders other than just shareholders. The
assumption that firms have responsibilities to shareholders is usually not contested, but the
point is that because corporations rely on various other constituencies such as consumers,
employers, suppliers, and local communities in order to survive and prosper, they do not only
have responsibilities to shareholders. Whilst many disagree on how much emphasis should
be given to shareholders in the CSR debate, and on the extent to which other stakeholders
should be taken into account, it is the expanding of corporate responsibility to these other
groups which characterises much of the essential character of CSR, as illustrated by the CSR
Asia definition in Figure 1.
 Alignment of social and economic responsibilities. This balancing of different stakeholder

interests leads to a fourth facet. Whilst CSR may be about going beyond a narrow focus on
shareholders and profitability, many also believe that it should not, however, conflict with
profitability. Although this is much debated, many definitions of CSR from business and
government stress that it is about enlightened self-interest where social and economic
responsibilities are aligned. See, for example, the definitions of the CBI, the UK government
and HSBC. This feature has prompted much attention to the ‘business case for CSR’ –
namely, how firms can benefit economically from being socially responsible.
 Practices and values. CSR is clearly about a particular set of business practices and
strategies that deal with social issues, but for many people it is also about something more
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than that – namely a philosophy or set of values that underpins these practices. This
perspective is evident in both the Gap and the Chinese Government definitions of CSR given
in Figure 1. The values dimension of CSR is part of the reason why the subject raises so
much disagreement– if it were just about what companies did in the social arena, it would not
cause so much controversy as the debate about why they do it.
 Beyond philanthropy. In some regions of the world, CSR is mainly about philanthropy – i.e.
corporate largesse towards the less fortunate. But the current debate on CSR has tended to
emphatically claim that ‘real’ CSR is about more than just philanthropy and community
projects, but about how the entire operations of the firm – i.e. its core business functions –
impact upon society. Core business functions include production, marketing, procurement,
human resource management, logistics, finance, etc. This debate rests on the assumption that
CSR needs to be mainstreamed into normal business practice rather than being left simply to
discretionary activity. The attempt to consider how CSR might be ‘built in’ to the core
business of firms as opposed to ‘bolted on’ as an added extra has become a major theme in
the CSR practitioner world (Grayson & Hodges, 2004). Even the then UK Minister for
Corporate Social Responsibility, Nigel Griffiths MP, noted in 2004 that ‘corporate
responsibility must be ingrained into the ethos of every business, built in, not bolted on.’
These six core characteristics, we would suggest, capture the main thrust of CSR. However, as
we will now discuss, the meaning and relevance of CSR will vary according to organizational
and national context.
CSR in different organizational contexts
The variety of definitions and perspectives on CSR discussed in the previous section is partly
credited to the fact that CSR is practiced in a broad range of different organizational contexts. In
the following we will explore these contexts by analyzing the role and relevance of CSR in all
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three main sectors of modern economies, i.e. the private sector, the public sector, and the civil
society sector (non-governmental organizations, or NGOs).
CSR and the private sector
The main arena of CSR, as indicated by the ‘corporate’ in CSR, is the business world. Within
that arena, however, we have a plethora of different types, industries and organizational forms. In
the following, we will have a look at one of the main distinctions, namely between large
corporations and small and medium-sized enterprises (SMEs).
Arguably, the language of corporate social responsibility indicates that CSR is predominantly a
concept that applies to large corporations, typically owned by shareholders and run by employed
managers. Certainly the seminal contributions on CSR, as discussed in Chapters 2 and 3 of this
book, conceive CSR against the backdrop of these large corporations. Therefore, as entities in
which ownership and control is separated (Berle & Means, 1932), one of the prominent issues
for thinking about CSR in the context of large corporations is the question of whose interest the
company should be run on behalf of by managers: just the interests of the owners or also the
interests of society at large, represented by different groups such as customers, employees or
local communities?
One could also argue that large corporations are far more visible and thus far more vulnerable to
criticism from the public than smaller firms. A large company that wants to behave socially
responsibly therefore may well have formal policies on its responsibilities, and how these are
managed. On the whole, then, CSR in large corporations typically results in a fairly structured
and formalized approach. CSR policies will be translated into codes of conducts for employees
or suppliers; there will normally be committees and managers responsible for CSR; and many
large companies involved in CSR will document their engagement in a dedicated annual report.
In such a report, the corporation discharges accountability for how exactly they have dealt with
different interests and expectations of society.
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If we turn to SMEs, however, we will find a rather different picture. In a recent study in the
Netherlands, only 20% of SMEs reported on their CSR as opposed to 62% of large businesses,
and similar differences were found with regard to the implementation of codes of conduct or
CSR committees (Graafland, Van de Ven, & Stoffele, 2003). There are a number of reasons that
account for these differences (see Spence, 1999). First, SMEs are normally managed by their
owner(s), who delegate decisions on CSR to a small number of people or often just to one
person. This will make the approach to CSR rather informal and ad-hoc as opposed to the
structured approach of large corporations.
Second, unlike large corporations – who due to size and branding are often quite visible and
vulnerable to criticism – SMEs are generally rather small and go under the radar of wider
society. Their key relationships with society are the personal relations developed between the
owner/manager and, for instance, his or her employees, suppliers, customers, or neighbours.
These personal relations, however, are of crucial importance to the SME and therefore much of
what we could identify as CSR in this context is targeted at building good personal relations,
networks, and trust (Spence & Schmidpeter, 2002).
Overall, it is probably fair to say that given the importance of SMEs, which in much of the world
account for the majority of private sector employment and GDP in their countries, the CSR
literature has so far paid disproportionate attention to larger organizations (Spence & Rutherford,
2003).
CSR and the public sector
At first sight, one would not necessarily expect CSR to be an issue for public sector
organizations, such as government ministries, agencies or local administrative bodies. After all, it
is ‘corporate’ social responsibility. However, in most industrialized countries, governments still
supply a large amount of all goods and services, somewhere between 40-50% of the GDP in
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many countries. Consequently, the same claims laid upon corporations to conduct their
operations in a socially responsible fashion are increasingly laid on public sector organizations as
well. For example, public sector organizations face the similar environmental demands, similar
claims for equal opportunities for employees, and similar expectations for responsible sourcing
as do private companies. Consequently, we increasingly find public sector organization adopting
CSR policies, practices and tools very similar to the private sector.
In some ways, these demands for CSR in the public sector could be even considered as more
pronounced (Seitanidi, 2004). Public organizations, such as schools, hospitals or universities, by
definition have social aims and are mostly run on a not-for profit basis. This establishes the
social dimension of their responsibility at the core of their operations. Furthermore, given the
size of many public bodies and agencies, as well as their quasi-monopolistic position in many
areas of services, they are likely to have an impact on society which is often far beyond the
impact of a single large corporation. Consequently, the claim for responsible behaviour on the
part of public bodies has grown, as has the demand for greater accountability to society in the
public sector. Just as private sector companies are exhorted to become more accountable in their
reporting and communication to the public, so we now witness a steady rise in the use of typical
CSR instruments, such as social auditing and reporting, by public bodies (Ball, 2004). For
example, the publicly funded UK media organization, the BBC, now publishes an annual CSR
report.
Apart from incorporating CSR into their own operations, many government organizations also
take an active role in promoting CSR within their sphere of influence. While CSR as such is a
voluntary business activity, governments have nevertheless tried to create incentives for and
facilitate the voluntary adoption of socially responsible policies by the private sector (Crane &
Matten, 2007: 488-499). So for instance the US government, in issuing the US Apparel Industry
Code of Conduct2 provided a regulatory basis for CSR by US companies in their overseas supply
chains. Often, governments are also part of multipartite initiatives to further CSR, such as the US
2
http://www.dol.gov/ilab/media/reports/iclp/apparel/main.htm (accessed February 2007)
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Global Compact3, which is a set of principles issued by the United Nations for voluntary
adoption by corporations globally. In particular the UK government, since the 1980s, has made
considerable efforts to encourage CSR in British companies through a number of initiatives
(Moon, 2004b), including the Ethical Trade Initiative (promoting fair trade practices) or the CSR
Academy (educating business people about CSR).
A similarly pronounced role in promoting CSR has been adopted by the European Union. In a
part of the world where CSR is still largely considered a novel and Anglo-Saxon idea, the
European Commission has invested considerable effort in defining and promoting CSR in
Europe, convening a multi-stakeholder dialogue which resulted in a widely discussed White
Paper in 2002 (Commission of the European Communities, 2002). More recently, these efforts
have continued in the establishment of the ‘European Alliance on CSR’ which, though facilitated
by the European Commission, represents a significant step towards business taking charge of
CSR in a more autonomous fashion (Gardner, 2006).
CSR and civil society organizations
Intractably linked to the rise of CSR is the role of civil society organisations (CSO) or non-
governmental organizations (NGOs).4 Many of the initial demands for more responsible business
behaviour – such as the protection of the environment, improvements in working conditions in
sweatshops in the developing world, or prevention of human rights violations in countries with
oppressive regimes – have been brought to the attention of the wider public by NGOs such as
Greenpeace, Save the Children, or Amnesty International. Traditionally then, the role of NGOs
in the CSR arena has been more that of a police officer or watchdog, a constant critic exposing
corporate misbehaviour and mobilizing pressure against allegedly irresponsible practices. This
role continues to be an important function of those CSOs whose skills in raising awareness and
3
http://www.unglobalcompact.org/ (accessed February 2007)
4
We use the term CSO and NGO interchangeably in this volume.
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publicly exposing corporations can be such a major reputational risk for ‘responsible’
companies.
Increasingly, though, companies have responded to these challenges and have tried to take on
board the criticisms of CSOs. In a considerable number of cases, this has resulted in a changing
relation between business and CSOs: rather than just being critic and opponent, CSOs have also
built partnerships with business in order to contribute to more socially responsible behaviour on
the part of corporations (Warner & Sullivan, 2004). Within these partnerships, corporations can
bring their considerable financial resources to the table while CSOs can offer their expertise and
public legitimacy, among other things (Elkington & Fennell, 2000). Moreover, a number of
broader industry- or countrywide standards for responsible corporate behaviour have emerged
from business-CSO partnerships. A prominent example here is the Marine Stewardship Council5,
a set of rules and practices for sustainable use of fisheries, which was initially set up by the NGO
Worldwide Fund for Nature (WWF) and the company Unilever. Indeed, many of the voluntary
approaches to self-regulation seen today come into existence with some degree of NGO
involvement (Doh & Teegen, 2003).
With the continued growth of NGOs such as Greenpeace, Friends of the Earth or Amnesty
International, many of which are global organizations with multimillion budgets and thousands
of members and employees, CSR has also becomes a topic for these organizations to think about
for themselves. Since they claim to campaign ‘in the public interest’, there is a growing demand
to improve their public accountability (Unerman & O'Dwyer, 2006). CSOs as well as
corporations need to be transparent about their causes, their funding, and their tactics, and to
provide their supporters and the general public with some degree of say in how they represent
these causes. This becomes more pronounced as business itself has increasingly moved towards
setting up CSOs which represent specific business interests, such as World Business Council for
Sustainable Development (WBCSD), the Global Business Coalition on HIV/AIDS (GBC) or the
Global Climate Coalition (GCC). Whilst on the outside, these organizations often look like
CSOs, they are in fact far different from normal grassroot CSOs, and have therefore been dubbed
5
http://www.msc.org/
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by some as ‘astroturf NGOs’ (Gray, Bebbington, & Collinson, 2006). Arguably, the challenge of
putting policies and practices in place for enhanced public accountability and transparency – in
other words, implementing CSR – is one of the key future tests for CSOs.
CSR in different regions of the globe
The meaning of CSR not only differs from sector to sector (as we have discussed in the previous
section), but it also differs quite substantially from country to country. To put CSR ‘in global
context’ (as our subtitle suggests) it is essential to understand the specific regional and national
contexts in which companies practice CSR. In the following section, we will therefore discuss
some basic characteristics of CSR in different regions of the globe.
CSR in developed countries
In its most well known guise, CSR is essentially a US idea. It was in the US where the language
and practice of CSR first emerged. Also, most of the academic literature on the topic, and most
of the key ideas discussed in the first section of this book, originate from there. The main reason
for this lies in the specific characteristics of the US business system (Matten & Moon, 2004b).
As such, American society is characterized by fairly unregulated markets for labour and capital,
low levels of welfare state provision, and a high appreciation of individual freedom and
responsibility. Consequently, many social issues, such as education, healthcare, or community
investment have traditionally been at the core of CSR. Philanthropy is high on the agenda with,
for instance, corporate community contributions by US companies being something like than ten
times higher than those of their British counterparts (Brammer & Pavelin, 2005). In other parts
of the world, most notably Europe, the Far East, and Australasia, however, there has always been
a stronger tendency to address social issues through governmental policies and collective action.
Many issues that US companies would typically boast about as CSR on their websites, such as
the provision of healthcare or fighting climate change, have not appeared until recently on the
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screens of continental European companies. The reason for this is that these issues have
traditionally been considered a task for governments or, in other words, the corporate
responsibility for social issues has been the object of codified and mandatory regulation. CSR for
European companies, therefore, has predominantly come on the agenda through their overseas
operations (where regulatory frameworks are different from Europe), and it is fair to say that
even until the present day, multinational corporations (MNCs) rather than domestic companies
can be considered to be the leading actors in European CSR. The US-Europe differences in CSR
are likely to persist and the way corporations address CSR issues, such as global warming, the
provision of affordable medicine to the developing world, or the use of genetically modified
organisms in food production, remains markedly different on both sides of the Atlantic (Doh &
Guay, 2006).
Countries such as Japan, and to a lesser degree South Korea and Taiwan, are considered fairly
similar to continental Europe in terms of the institutional context for CSR. They are
characterized by high bank and public ownership, patriarchal and long-term employment, and
coordination and control systems based on long-term relations and partnerships rather than
markets. The Japanese ‘Keiretsu’, the Korean ‘Chaebol’ or the (mostly state owned) Taiwanese
conglomerates have a legacy of CSR similar to European companies – including life-long
employment, benefits, social services, and healthcare – not so much as a result of voluntary
corporate policies, but more a response to the regulatory and institutional environment of
business.
The reasons for the rise of CSR in Europe and in these developed economies in the Far East in
recent years are several. To begin with, MNCs with their home base in such countries are
challenged to implement more CSR in their operations located in countries with poor governance
and low levels of state provision of public services, human rights protection, or environmental
protection. Furthermore, some of these developed economies have undergone substantial
overhauls of their welfare systems and regulatory frameworks, resulting in lesser degrees of state
attention to social issues and more discretion for private actors. The United Kingdom is probably
the best example here, where radical reforms that liberalized labour and capital markets, together
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with the privatization of public services and publicly owned companies, contributed to a
significant surge in CSR (Moon, 2004a). Increasingly, corporations in the UK have assumed
responsibility for regenerating local communities, addressing unemployment, sponsoring schools
and education, as well as improving public transparency and accountability.
In addition to these domestic political changes, globalization also represents a powerful booster
of CSR - as we will discuss in more detail in chapter 11. The rise of global investors linking their
investment decisions to ‘socially responsible investment’ criteria, the growth in global NGO
activism scrutinizing corporate behaviour, and intensified exposure of business by the media
have all boosted growing attention to CSR in Europe and elsewhere (Matten & Moon, 2004b). It
can also be observed that in most developed countries we have specific domestic CSR issues that
shape the debate in the respective context. For instance, many European countries see CSR
specifically with regard to the protection of the natural environment, while the CSR debate in the
Far East prominently features issues of corporate governance and transparency in large
conglomerates (Webb, 2006). Often the CSR debate in a country reflects longstanding and
ongoing deliberations in society at large: for instance in Australia and South Africa, considerable
expectations have been directed towards companies to address and uphold rights of aboriginal
and black people respectively, or to contribute to their economic empowerment more generally.
CSR in developing countries
The activities of Western MNCs in developing countries have also been a major driver behind
the recent surge in CSR over the last two decades. Many companies use developing countries as
a source of cheap raw materials and, in particular, cheap labour. Against this backdrop, it was for
instance, campaigns against Shell’s role in Nigeria and Nike’s labour practices in its Asian
supply chains that triggered significant changes toward more responsible practices in many
MNCs (see case study 3, xx-xx for more on the Nike story).
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Developing countries can at times be characterized by various features that can offer
considerable scope for the exercise of CSR. These include low standards for working conditions
and environmental protection, high corruption, oppressive regimes with low regard for human
rights, poor provision of healthcare and education, as well as low levels of per capita income and
foreign direct investment. Although this is not a fair representation of all developing country
contexts at all times, the main challenge for MNCs from the developed world when they are
faced with such circumstances lies in conducting their business in a way that would be
considered socially responsible in their respective home countries. The paper by Scherer and
Smid in chapter 11 (XX-XX) describes some of the approaches companies have applied to
tackling such challenges.
It is important to recognize though that a growing number of domestic companies in developing

countries have also developed an interest in CSR. The main CSR issues these companies are
concerned with include contributions to enhance the infrastructure of health, education, and
transport, and to serve as examples of good governance. Similarly, as the example of the
Grameen Bank6, founded by Nobel Peace Prize winner Muhammad Yunus shows, a key topic on
the CSR agenda is the encouragement of small scale entrepreneurship through micro-credit, and
the economic empowerment of women and other marginalized minorities.
As the last example shows, the debate in the global South has begun to shift from understanding
CSR as aid, towards thinking of responsible behaviour more in terms of development. Arguably,
one of the main reasons why these countries are poor is the absence of economic activity and
growth - and it is here where one of the main responsibilities of business can be seen.
Implementing CSR in this sense would therefore require MNCs to conduct business and bring
FDI to developing countries in the first place, and then ensure that the wealth created is locked
into development. So, for instance, the World Business Council for Sustainable Development
recently issued an in-depth report on how business supports the implementation of the UN’s
Millennium Development Goals7 (WBCSD, 2005). Many of the points raised in the report do not
6
http://www.grameen-info.org/
7
http://www.un.org/millenniumgoals/.
16
17
refer to business ‘sharing’ its wealth with these countries but business being present in these
countries in the first place. The article by Prahalad and Hammond in Chapter 11 (xx-xx)
develops one particular approach to poverty alleviation in developing countries that indicates a
major potential role for business in development.
This role of MNCs, however, is not uncontested. Many critics argue that profit maximising
corporations have only very limited interest in these more political goals, and that evidence of
MNCs contributing positively in the developing world is at best sketchy (Frynas, 2005).
Ultimately, according to the sceptics, responsible corporate behaviour in the developing world is
an issue that cannot be left to the voluntary discretion of business people but needs to be
addressed by more stringent regulation in their home countries in the global North (Aaronson,
2005).
CSR in emerging/transitional economies
Between those two major categories of developed and developing countries there is a third
category that deserves attention from a CSR perspective. Most countries of the former
communist bloc have changed from a planned and government run economy to a capitalist
market system. While the social responsibility of state-operated business in the former model
was far reaching, including broad provision of education, healthcare, housing and a plethora of
other services, the transition to a market economy has seen many of these former conglomerates
dismantled and transformed into shareholder owned companies. While there is a plethora of
different approaches to CSR in these countries, one might argue that in some respects, Russia
and China represent the more extreme cases. Russia, on the one hand, has seen privatization and
the turn to capitalism accompanied by rather weak and corrupt governmental institutions
resulting in what some would refer to as a ‘cowboy economy’. It is therefore little wonder that
CSR is still a largely unknown concept in Russia (Grafski & Moon, 2004) and for many Russian
business people, bears strong resemblances to communist times. China, on the other hand, has
maintained a strong capacity for the state in controlling and regulating the economy and whilst
17
18
the role and responsibilities of business in society might not always be referred to in terms of the
Western language of CSR we still see considerable involvement of companies in the area. Many
commentators expect that China, with growing economic development, will see a rise in CSR-
oriented regulation in the next few years (Miller, 2005).
Conclusion
In this chapter we have discussed the development of CSR, and its recent rise to prominence. We
have also examined the maze of definitions that have been used to delineate CSR in order to
develop some core characteristics of the concept. Finally, we explored the meaning and
relevance of CSR in different national and organizational contexts. What should certainly be
clear by now is that the term ‘corporate social responsibility’ is very difficult to pin down
precisely – it can have many meanings, applications, and implications, and these are rarely
agreed upon by those who take an interest in the debate. This may not make our lives any easier
when studying CSR, but it certainly makes it more interesting!
In this book, we have adopted a deliberately broad perspective on CSR in order to provide a
well-rounded introduction to the subject. Included in the following chapters are those that
espouse a view of CSR thoroughly embedded in a pro-corporate ‘business case for CSR’ as well
as those that argue for a more political view of CSR that attends to the need to make corporations
more accountable to the societies in which they operate. The point of this text is not so much to
suggest that any of these perspectives is necessarily ‘better’ or more ‘correct’ than another, but
more to provide an insight into the richness and the diversity of the CSR literature. Editing a
collection of readings on CSR allows us to present some of this heterogeneity whilst
simultaneously providing some guidance as to how to ‘read’ some of the different contributions.
After all, it is clear that many of the authors writing about CSR in this book are engaging in a
discussion about CSR for different ends, and bring with them very different assumptions about
the nature and purpose of the corporation. The introductions to the readings will offer some
useful insight on these purposes and assumptions, at least as far as we see them.
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19
The book is organized into three sections, dealing with respectively:
 Understanding CSR
 Applying CSR
 Managing CSR
In designing this structure, it is evident that our main focus is around the actual performance of
CSR by organizations, although the book also offers considerable theoretical insight on CSR by
bringing out key conceptual issues as they pertain to particular CSR practice and principles. The
applied approach that we take is also demonstrated by the three integrative case studies that
appear at the end of each section. These are intended to bring together some of the main issues
that arise in the different chapters in each section, and offer some fascinating insights into the
challenges of CSR in a global context.
Ultimately, the theory and practice of CSR as presented in this book represents a work in
progress. The subject has risen to prominence only relatively recently, and has been disseminated
across the globe with remarkable speed. The way in which CSR is understood, practiced, and
institutionalised in the global context is ever-changing and open to substantially different
interpretations. This book offers a multi-faceted, and relatively comprehensive account of CSR
as it stands today, but this account is by no means the only or the final one.
Study questions
1. What is CSR and why has it risen to prominence in the past decade?
2. What are the six main characteristics of CSR? To what extent do these characteristics
delineate CSR from other concepts such as business ethics and corporate citizenship?
3. Select four corporations and four NGOs and research their perspectives on CSR on the web.
To what extent is there overlap and divergence in their view of CSR? What can account for
these similarities or differences?
4. ‘CSR is only relevant for private sector companies’. Critically discuss, providing examples
from the public and civil sector.
19
20
5. Can or should CSR be transferred to developing and emerging economies? What are the
benefits and drawbacks of this for the countries concerned?
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This is the pre-publication version of Chapter 1 from Crane, A., Matten, D. and Spence, L. (2008), Corporate Social Responsibility: Readings and Cases in Global Context, London: Routledge, pp.3-20.
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Figure 1: Organizational definitions of CSR
Organization Type of Definition of CSR Source

organization
‘The voluntary actions that business can take, over and above
UK Government Governmental compliance with minimum legal requirements, to address both its own www.csr.gov.uk
organization competitive interests and the interests of wider society’
‘A concept whereby companies integrate social and environmental EC Green Paper 2001
European Governmental concerns in their business operations and in their interaction with their ‘Promoting a European
Commission organization stakeholders on a voluntary basis’ Framework for Corporate
Social Responsibility’
Ethical Corporation, 2005.
Chinese Ministry Governmental ‘A concrete action taken by Chinese companies to implement the ‘Politics: A Chinese
of Commerce organization political aspiration of the new Communist Party collective leadership - Definition of CSR’, 15 Sep
putting people first to create a harmonious society’ 05: www.ethicalcorp.com
Confederation of Business ‘The acknowledgement by companies that they should be accountable www.cbi.org.uk/
British Industry association not only for their financial performance, but for the impact of their
activities on society and/or the environment’
World Business ‘The continuing commitment by business to behave ethically and WBCSD, 1999: ‘CSR:
Council for Business contribute to economic development while improving the quality of life Meeting Changing
Sustainable association of the workforce and their families as well as of the local community Expectations’
Development and society at large.’
‘Being socially responsible means striving to incorporate our values and www.gapinc.com
Gap Inc Corporation ethics into everything we do − from how we run our business, to how we
treat our employees, to how we impact the communities where we live
and work’
‘Means managing our business responsibly and sensitively for long-term www.hsbc.com
HSBC Corporation success. Our goal is not, and never has been, profit at any cost because
we know that tomorrow's success depends on the trust we build today’
Christian Aid Non- ‘An entirely voluntary, corporate-led initiative to promote self-regulation ‘Behind the mask: the real
government as a substitute for regulation at either national or international level. face of corporate social
organization responsibility’, 2004.
CSR Asia Social ‘A company’s commitment to operating in an economically, socially and
enterprise environmentally sustainable manner whilst balancing the interests of www.csr-asia.com
diverse stakeholders’
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CSR in Global Context

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Corporate Social Responsibility: In Global Context

Article · January 2013

Andrew Crane Dirk Matten

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CORPORATE SOCIAL RESPONSIBILITY: IN GLOBAL CONTEXT

In this chapter we will:

 Examine the recent rise to prominence of corporate social responsibility

Introduction: the recent rise of CSR

Electronic copy available at: http://ssrn.com/abstract=1667081

Electronic copy available at: http://ssrn.com/abstract=1667081

Defining CSR: navigating through the jungle of definitions

Figure 1 about here

Core characteristics of CSR

 Multiple stakeholder orientation. CSR involves considering a range of interests and

 Alignment of social and economic responsibilities. This balancing of different stakeholder

CSR in different organizational contexts

CSR and the private sector

CSR and the public sector

CSR and civil society organizations

CSR in different regions of the globe

CSR in developed countries

CSR in developing countries

It is important to recognize though that a growing number of domestic companies in developing

CSR in emerging/transitional economies

The book is organized into three sections, dealing with respectively:

Figure 1: Organizational definitions of CSR

Organization Type of Definition of CSR Source

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